Developers, industry battle for L.A.'s heart

The old warehouse at the corner of Industrial and Mateo streets in downtown Los Angeles had seen better days when Yuval Bar-Zemer and his partners at the Linear City development firm bought it in 2002.

The 1924 structure, in a rundown section of downtown, was a World War II-era bomb shelter and later a toy factory. It was being used to store the plush shells of stuffed animals.

The developers transformed it into 119 live-work units, with a rooftop pool and other communal amenities. They dubbed the new space Toy Factory Lofts. On the building's ground floor are a pub-style restaurant, a high-end grocery store and a health club.

And this weekend, the developers finished work across the street converting the former West Coast headquarters of the Nabisco company into 104 live-work condo units.

But what might seem like a tale of urban renaissance is actually at the center of a fierce battle brewing in downtown L.A. that pits the shiny new downtown against the gritty version that has long existed in the heart of the city.

Developers like Bar-Zemer are pushing Los Angeles to radically rezone the city's industrial core to allow residential development. They argue that the change would create a new type of neighborhood, one that would mix light industry with condo living and live-work lofts -- spaces where artists, architects and others can operate businesses and sleep at night -- and would ultimately create more jobs and tax revenue for the city.

The city Planning Department and some community activists, however, are resisting the heavy lobbying. They say the industrial zones provide solid jobs for the working class and boost L.A.'s economy.

"In the rush to build some downtown fantasy, we should be careful not to destroy the things about downtown that actually work," said Joel Kotkin, an urban planner who has written extensively about L.A.'s economy. "The industrial stuff actually works: It employs a lot of people, there's a low vacancy rate, and being at the center of a transportation hub really matters."

At stake is the future of the city's industrial land -- and not just in downtown.

About 8% of the city -- or 19,000 acres -- is zoned for industrial use, mostly properties used for manufacturing, storage, distribution and other commercial operations. Although the debate now centers on the vast tracts around downtown, where the largest concentration of the industrial land is located, the proposed changes could have a ripple effect elsewhere, including Hollywood, the Westside and the San Fernando Valley.

The debate goes beyond issues of planning, zoning or architecture, say most people familiar with the discussions, and centers on the very nature of what a city is supposed to be, and who it should be for.

"We need as a city to move away from our 1950s-era suburban-model approach to zoning and instead devise land-use regulations that combine uses, to create jobs and housing on one site at one time," said Kate Bartolo, senior vice president of development for the Kor Group, which is developing a number of projects downtown, including the conversion of the former Barker Bros. furniture warehouses in the industrial district into condos and retail space.

The debate exemplifies how the economics of revitalization are rapidly changing Los Angeles.

As the boom in downtown residential real estate moves into the industrial district, aging factory spaces are suddenly worth more if converted into lofts. That's because large industrial living spaces are selling for a premium, costing $500,000 or more for each unit.

Because of this, many owners of industrial businesses are conflicted, because they see the economic benefits of residential conversion.

A city report placed the price of land for residential uses downtown at roughly five times that of industrial land. If the industrial land downtown is rezoned, city officials say, that value could rise even more sharply.

At the same time, however, the city found that the industrial district around downtown supports 64,000 jobs, most of which pay around $19 to $24 an hour (though some developers say those numbers are somewhat inflated).

For more than 100 years, downtown has been the heart of industrial L.A. -- ever since the Southern Pacific Railroad opened L.A.'s first rail depot there in the late 1800s.

As the city grew, so did the district, and brick buildings began to dot the nearby landscape, built to handle the vast number of goods coming into the region.

By the 1920s, national firms began locating their West Coast branches in the city center, said Greg Hise, an associate professor of urban history at USC's School of Policy, Planning and Development.

Today, though, the downtown warehouse district is a tangled mix of industry and neglect.

The district's streets are, quite literally, crumbling, riddled with cracks, the skeletons of old rail lines and wheel-size potholes. Few of the area's loading docks, built decades ago, can accommodate modern semi trucks.